Cherrington Company Uses a Process Costing System

question 70

Multiple Choice

Cherrington Company uses a process costing system. For May, the month just completed, the beginning work in process inventory consisted of 50,000 units which were 60% complete with respect to conversion costs. The ending inventory for the month was 20% complete with respect to conversion costs. A summary of cost data for the month follows:



-Using the weighted-average method, the cost per equivalent unit of conversion cost for May is closest to:

• A) $5.65
• B) $5.83
• C) $6.00
• D) $6.41

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Definitions:

Compounded Semi-Annually

The process of adding interest to the principal sum twice a year, where interest earns more interest in subsequent periods.

Compounded Quarterly

Interest is calculated four times a year on the initial principal and the added interest from previous periods.

20 Years

A period or duration of two decades.

Compounded Monthly

A term referring to the calculation of interest on the initial principal and also on the accumulated interest from previous periods, computed each month.